Pidilite sees stable demand in FY27, raises concerns over higher input costs

New Delhi, Adhesives and construction chemicals maker Pidilite Industries expects the domestic demand environment in FY27 to remain stable, backed by the government's fiscal and monetary policies, and continued investment in infrastructure.

However, it raised concerns over increasing input costs and supply chain disruptions triggered by the ongoing conflict in West Asia.

The raw materials for Pidilite's major products like adhesives, sealants and construction chemicals are closely linked to crude derivatives. The company, which owns popular brands such as Fevicol, Dr Fixit, FeviKwik and M-Seal, has seen a rise in input costs due to a surge in crude oil prices triggered by tensions in West Asia.


Despite the rising input costs, Pidilite delivered improved underlying volume growth (UVG) across both its Consumer & Bazaar (C&B) and B2B segments in FY 2025-26, according to the latest annual report of the company.

"The domestic demand environment is expected to remain stable, backed by Government fiscal and monetary policies, continued investments in infrastructure and construction," the company said, while cautioning that prices of major inputs have risen steeply on account of the West Asia conflict, along with supply chain challenges arising from disruptions to shipping through a key sea route.

After the West Asia crisis, the price of inputs, particularly for Vinyl Acetate Monomer (VAM), a key ingredient sourced from crude oil, has gone up substantially. VAM is the primary raw material used to manufacture Polyvinyl Acetate (PVAc), the core polymer base for white wood adhesives like Fevicol.

The company also pointed to continued uncertainty in the global economic and geopolitical environment, saying it remains watchful given the impact on global demand and inflation. It added that the imposition of tariffs in key markets has impacted its exports to those destinations.

Pidilite said it is undertaking demand-generation initiatives aimed at delivering profitable underlying volume growth in the current fiscal.

However, it cautioned that slower growth of the Indian economy stemming from the West Asia conflict, higher and constrained availability of key inputs, and stress in sectors such as construction could weigh on the company's performance in FY27.

"While there are near-term concerns with respect to the disturbed geopolitical situation and its cascading impact on demand and inflation, the company is confident of the medium to long-term prospects of the home improvement sector and remains focused on delivering consistent and profitable volume-led growth," the annual report added.